Monday, November 9, 2009

Mayor: College Students Can Do It All [*]

Pittsburgh had been informed since the summer that eventually there would be some "mix" presented among four (4) unpleasant options to cover a $15 million shortfall in the City budget.

If I had thought to make a prediction for today, I would have said a quarter, a quarter, a quarter and a quarter: even Stevens.

Well, ta-da:

Shelved, for now, are proposals floated by the mayor since May that include a tax on hospital bills, a surcharge on all-day parkers in public lots, and a hike in the water rates charged to educational and medical customers. (P-G, Rich Lord)

Instead, a 1% tax on college tuitions is to cover the whole thing.

And the sweetener?

The tuition tax would raise around $16 million a year. Of that, $15 million would cover increased payments to the city's limping pension fund and capital needs, required by its recovery plan under state Act 47. The balance would become a dedicated, annual payment to the Carnegie Library system, which faces a budget deficit that has prompted plans to close four city libraries, merge two others, and move yet another. (ibid)

Of the four, this one was never my favorite -- perhaps because it was the easiest political lift. It won't overjoy our universities, yet it will fail to engage our hospitals, medical centers, insurers and most other nonprofits. The pain will be nicely segregated from "average" Pittsburghers. This will be interpreted as what it is, a tax on students: a transient, ill-informed, half-engaged "them" (including their unwitting parents) who most voters probably will be happy to see taxed. Just as they were content to see them get "handled" after the G20.

Shrewd? Absolutely, terribly, perfectly. Fair? I'm not certain we will be having that discussion.

Meanwhile, the non-profits as a group will be left unfettered, making the recent anticipation of divergent viewpoints between Mayor Ravenstahl and County Executive Onorato or a gold rush by the both of them very moot. Neither want to address the elephant in the region, period.


*-UPDATE: It's too bad ledes like this never quite make it to print:

Calling it "The Fair Share Tax," Pittsburgh Mayor Luke Ravenstahl today said that if Pittsburgh City Council agrees to slap a 1 percent levy on college tuition bills, "our financial recovery will be complete." (P-G, Rich Lord)

Also, your journey to the Dark Side.

University of Pittsburgh students would pay $135 a year, he said. "That's less than one-tenth of what Councilman [William] Peduto pays in property and wage taxes." (ibid)


  1. It may not be the favorite of the four options, but at least it seems to have higher potential for ongoing productivity, which would appear to put it ahead of the garage-leasing.

    I don't think it's perfect, but I think it's a decent start. Those items on the shelf - two of them, at least - shouldn't collect too much dust, though.

    Then again, I wonder if it would be possible for Pitt/CMU/Carlow/Point Park/Chatham/CCAC to come together and bog the city down with something approaching a chunk of that 16 mill in costs incurred by the "fight, or battle, if you will," to quote the proposer.

    Re: the "anticipation of divergent viewpoints," I think you hit the nail on the head in a previous post that Dan O. is in the favorable position of being able to say one thing, yet have the opposite action take place.

  2. The students may be semi-oblivious to the costs, but a lot of city and Allegheny County residents send their kids to Pitt and CCAC in particular. I would assume that only the students who take classes at the Allegheny Campus of CCAC have to pay the tax ... what if I take one class at Allegheny and the rest outside on non-city CCAC campuses? An accounting nightmare. Do the kids who get "the Promise" have to/get to pay the tax??? I think a lot of parents need to be lining up to testify on this bill.

  3. Where is this money going?
    Maybe the City should try to reduce their pension benefits instead of trying to tax everyone.

  4. Chris Peak - Just to clarify, the long-term leasing of the parking garages is still very much "moving forward", like full steam ahead. That's where the rather important one-time $200M infusion is supposed to come from. It was a surcharge on all-day parkers that was among the four options for plugging up the $15M hole in the annual budget.

    And my guess is -- though you may be right and he has that gambit available to him -- Dan O actually is twisting arms to make sure his veto holds up.

  5. Right, I was lumping the garage leasing in with the other four options. That was my mis-speak. My point overall was that these options present an opportunity for ongoing revenue, rather than the one-time infusion, as you put it. I'm not keen on short-term gratification - as needed as it may be - when other long-term options exist, although this quartet of options isn't necessarily addressing the same quandary.

    Re: Dan O., I keep thinking on the South Park episode that examined the public response to the Iraq war. The overall message was that the country's best course of action was to say one thing but do another. Although O.'s claim of illegality is saying one thing very strongly.

  6. So UPMC hides behind the Pittsburgh Promise, and Highmark behind UPMC?

  7. From a friend via e-mail:

    "One thing Delano didn't calculate...grad students pay a lot more in tuition per hour...I don't know what the number is but it's likely that grad students (a lot of whom own houses and pay property taxes, and work in the city, and vote) will be paying several hundred dollars more in this tax than undergrads."

    EdHeath - Ha! I never thought of it that way. And West Penn Allegheny hides behind them both.

  8. Yes, does this include medical students, law students, graduate and professional students? What about grad students who have a tuition waiver and get a stipend for teaching or research?

    I feel worst for the culinary students who pay very high tuition and have total crap earning potential. They probably are getting the worst deal of anyone! (I did read somewhere that they were included didn't I? Or am I making that up?)

  9. How did the Port Authority reach agreements with the universities for service fees? Flash your Uni ID and ride all day... Perhaps the city resources consumed by students are difficult to express as a simple commodity?

    Suppose the city waive permit fees for students: parade; construction; pool hall; parking; carnivals; vendor; sky's the limit...

  10. Well, one good thing I can say about it is that at least with this increase in the tuition bill, the proceeds are clearly going toward something that's clearly outlined. Despite huge endowments, colleges and universities continue to raise already exorbitant tuition and fees each year to support mysteries "costs" that seem to never be adequately explained.

  11. I agree with Archi. If you (could) tax the colleges and universities directly, they would just increase tuition (again) and then pass on the additional expense to the students.

    Same with the healthy Health Care providers. The "little guy" almost always ends up with the tab in the end.

  12. And why are college students -not the beneficiaries of the pension program - being asked to shoulder this burden? Is this part of the pittsburgh "promise"?

  13. You have to read the most scathing piece on the mayor's stupidity at Sales Tax Buzz. Funniest piece ever!!

  14. Where does it say that the city even has the authority to levy this tax on college students?

  15. I don't think that they do. I am hearing that they have no legal right to do this.

  16. Just another move by the oldest city in America to alienate the young, educated segment of the city and encourage them to move somewhere more hospitable.

  17. So if the mayor wants to tax the college students because they use city services, then rightfully the suburban governments should tax the city residents who use suburban services. How about the city resident who shops at Ross Park Mall, has a fender bender and calls the Ross police? Think about it.

  18. Can the City reduce pension costs by going to a 401K like everyone else?
    Do they have to have a defined pension plan?

  19. I for one hope that they tax college students. I call for a 2% tax. All of you mayor luke supporters and former boytoy cheerleaders can now open the wallets. Talk about screwing your self. It's like a putz I saw today complain about a councilman's gas usage. Well, guess what MF'er? You turned the other cheek for years in defense of people like the mayor. Now look what you get. Crocodile tears anyone?

  20. In the grand scheme of things 1% is not very much. Typical Ravenstahl political expedience though, targeting many students who either don't vote or are registered somewhere else. Why antagonize those who are likely your only way to fiscal and future success of Pittsburgh? When has Luke ever come up with a creative or made a difficult decision? Did he even check the legal ramifications?